On this episode Josh talks with Mark Colgate, Professor of Service Excellence at the University of Victoria, Gustavson School of Business. They discuss, scientifically, of what good service is comprised.

Known for his passion for excellent customer service and his innovative teaching style, he brings a coaching approach that blends the science of service with the frontline delivery of sales and service in a professional way. His teaching reflects this research, having taught many courses in service excellence, coaching, and marketing at undergraduate, postgraduate and executive levels.

Mark has consulted for many service organizations including the Commonwealth Bank of Australia (where he was general manager for customer satisfaction for three years), TELUS, the Bank of Ireland, the Bank of New Zealand, Kiwi Experience, Sony, Toyota, Whistler Blackcomb and many areas of the B.C. government.

In today’s episode you’ll learn:

  • What is the science of service?
  • What does it have to do with systems?
  • Is there a science of what people do to deliver great service?
  • What is the first thing you need to do to achieve that?
  • How to become an effective delegator?


Transcript

Narrator:         Welcome to The Sustainable Business Radio Show podcast where you’ll learn not only how to create a sustainable business but you’ll also learn the secrets of creating extraordinary value within your business and your life. In The Sustainable Business, we focus on what it’s going to take for you to take your successful business and make it economically and personally successful. Your host, Josh Patrick, is going to help us through finding great thought leaders as well as providing insights he’s learned through his 40 years of owning, running, planning and thinking about what it takes to make a successful business sustainable.

Josh:                 Hey, how are you today? This is Josh Patrick. You’re at The Sustainable Business podcast.

My guest today is Mark Colgate. It says [inaudible 00:00:48] man. I guess, we’re going to have to ask him what the heck that means. He’s a professor at the University of Victoria in British Columbia. He has released a second book about a year ago. It’s called The Science of Service. That’s what we’re going to be talking about today. Let’s bring Mark on and we’ll start the conversation.

Hey, Mark. How are you today?

Mark:               Great, Josh. Thanks for having me on.

Josh:                 My pleasure. Thanks so much for joining us.

Mark, tell me what is the science of service? I always thought service was an art, not a science.

Mark:               I think that’s the uninteresting part. You know, we know there’s a science to biology, psychology, economics and that science has been around for those areas for quite a long time, but there’s also a very robust and insignificant science to delivering service – quality in the eyes of the customer. And so, I’ve really spent my whole career understanding what is that science and how that science can help organizations deliver a better customer experience. There’s, literally, tens of thousands of pieces of research on how to do a better job in terms of being reliable, delivering a great experience in the customer’s eyes, handling customer complaints. And so, accessing that science of organizations so they can re-design themselves deliver a better experience is really what my book’s about and really what my career has been about as well.

Josh:                 When I hear the term science of service, it sort of makes me thing about systems. Is that what we’re talking about?

Mark:               Absolutely. Really. Excellent. Yeah. It usually takes a while for people to pick up on that but you picked on that immediately. Yes. It’s really about designing a strong service system from everything that you’re doing is based on science and all the sort of roads lead back to the same thing which is delivering a great experience in the customer’s eyes and understanding the journey map from the customer’s point of view and re-designing ourselves so you can do a better job on all those touch points that you have.

You’re right, it’s all about a service system. It’s about your HR system connecting with what you’re doing for your customers. It’s about your measurement system. It’s about your processes that you have going on inside your company and re-designing those so you build a stronger service system.

Also, about having a very clear goal. What are we trying to achieve in terms of our customer experience? What is our goal? What is our ambition in terms of using customer service and delivering higher levels of service quality as well? So, absolutely, it’s all about using the science to design a robust and strong service system.

Josh:                 When you say science, besides having a great service system, is there a science of what people do to deliver great service?

Mark:               Absolutely. As I said, there’s a really robust science and it crosses so many areas that there’s science of expertise, social psychology, also fixed and growth mindsets tapping into Carol Dweck’s amazing work on mindsets as well. Customer complaint handling has been one of the areas of science that’s been investigated probably more than any other areas. So, there’s a really deep science in terms of what customers want in terms of organizations delivering a better experience for them.

And so, my career is about “What is that science? And how can we help organizations use that science in a way to design that service system?”

Josh:                 Now, it sounds to me like you just named off seven or eight different disciplines that you would need to know about to design a scientific, systemized service model.

I own a business with 25 employees. Maybe I can find an hour a week to work on something like this. What kind of advice can you give somebody like that?

Mark:               It’s about basically building in habits, commitments and rituals that enable these things to happen all the time. So, rather than saying, “All right, I’m going to dedicate a set per hour” to you’re looking at these kind of things. It’s more about, “Well, how do we weave these into our everyday practices?”

One of the things that I’m a huge advocate of is coaching. I was a general manager of the customer satisfaction of Commonwealth Bank of Australia for three years. They were the worst bank in Australia when I joined. And over a five-year period, we turned them to be the best bank in Australia. We used coaching really heavily to help them deliver a better experience for their customers. And so, by weaving that in, into everyday work, where the leaders spent time observing employees, serving customers, giving them feedback so they continually raised their game. That’s the kind of thing you need to build in.

Also, having continual customer service meetings. At Commonwealth Bank, every Monday morning, we had a customer service meeting where we only spoke about “How could we do a better job this week in delivering a better experience to our customers?” We came up with the big five which is our “Five Ideas to Do a Better Job This Week.” And then, on the Friday, we had an after-action review so that we kind of looked at these things again.

I think it’s all about not necessarily dedicating new time but “How can we use the time that we build into our everyday work so these become part of our commitment?” It’s just like the Ritz Carlton do their daily lineup where every team meets the beginning of every shift, from the CEO’s team right down the front line to talk about “What can we do today to do a better job in delivering customer experience?” It’s kind of building in those commitments, habits, rituals that will enable you live these things out and build them in as part of your system rather than as an add-on or something you’re doing off the side of your desk.

Josh:                 My experience with small business is that, because they have limited bandwidth, they often– you know, if somebody’s listening to this podcast right now and they’re running a small business, they’re likely thinking, “There’s 19 different things I have to approach” and I can tell you for a fact that when a small business person tries to work on any more than two things at once, none of them get done.

Mark:               Exactly.

Josh:                 If I’m a small business person and I say, “You know, I really need to up our game on our customer service part of our business”, what’s the first thing you would have them do?

Mark:               What I would have them do is implement a very simple customer service framework, something that all employees can use straight away. So, in the book, I advocate a framework called the 3Rs. Again, going back to the science of service, research over the last 50 years has shown that you can collapse all the great customer service into what they call the 3Rs which is reliability, responsiveness, and relationships. Customers want you to be reliable. They want you to be responsive. And they want you to build relationships. They come in that order.

Reliability is the most important. Reliability is about keeping your promises, having the right knowledge, answering customer’s questions, taking ownership of the customer experience, handling customer complaints when they come along. Responsiveness is speed and efficiency, keeping the customer informed, giving them information so they feel in control of the experience like FedEx allows you to track their packages so you know exactly where are your package is and gives you a sense of control. And then, finally, the relationship piece which is building strong relationships, giving customers attention, personalizing experience towards them.

What I encourage organizations is to adopt that simple customer framework, from day one, where all employees know reliability is the most important thing. Then, being responsive. And then, once you’ve got those two right, relationships will get the shine that they deserve.

If you implement that framework from day one and if you’ve got a small organization, that’s relatively easy because even if you’ve got 20 employees to buy into that and you use that framework to coach people, that’s very simple easy start. The 3Rs is something everyone can remember. And that’s been very successful for us and lots of small businesses.

Josh:                 That makes great sense to me. You know, while you talking about that, what came to mind is a book by Charles Green – I never remember his co-author, but called The Trusted Advisor.

Mark:               Yes.

Josh:                 Have you ever read the book?

Mark:               Yes, I have. Yep, I love the book.

Josh:                 Yeah. You know, the genius in that book is their trust formula which is reliability + competence + intimacy / self-interest, tells you how much you’re going to be trusted.

Mark:               Right.

Josh:                 Frankly, what you just described is the top line of that trust formula itself that fits in so well in so many businesses, in so different areas. I think you’re right on.

Now, you mentioned something before, when you were talking about coaching – when you first mentioned coaching, which I call the retrospective which is a look back over the prior period to see what you could do better or different–

Mark:               Yes.

Josh:                 –and build on that. Can you talk a little bit about that because, in my experience, that’s the missing piece that most small business owners never get around to?

Mark:               Right. Obviously, that retrospective can come in many different forms. The coaching model is a little bit more active than maybe a retrospective. It’s where you actually, in real time, observe an employee serving a customer and you can give them feedback about the things they’re doing really well so you boost their confidence in the areas that they can improve. Obviously, the idea of coaching is they work most of it out themselves but there’s always an opportunity for you to provide some feedback.

But also, I think, you’re absolutely right. I think using the voice of the customer, in particular, for that retrospective. We can do our own retrospectives and think about how we can do better but the best retrospective is collecting voice of the customer, asking customers, “What was the one thing you like about what we’re doing at the moment? And what’s the one area we can improve?” If you keep collecting that information and using that as your retrospective to say, “We’ve spoken to 25 customers this week and there’s the 25 things that we like about what we’re doing. Here’s the 25 areas they say we can improve.” That’s the best retrospective that you can have.

One retrospective is giving people feedback based on observing them. Another one is simply using voice of the customer to continually get feedback as to how you can improve. I think, again, we can sit in a meeting and get all the 20 employees in our company together and talk about how we think we can do a better job but I think what makes it really real is when customers are giving your feedback.

Again, my experience, Josh– I’d love to hear about yours, but my experience is if I go to a restaurant and, at the end of the meal, I leave – it could be based on the quality of the restaurants that I go, but I’ve never once been stopped on the way out of a restaurant ever, in the whole of my life, for someone to say, “Mark, I’m the manager of the restaurant. Could you give me a little bit of feedback? What’s the one thing you loved about your restaurant experience tonight? What’s the one thing we can improve?” If you think you did that five customers a night, over the course of 52 weeks of the year, that retrospective would be mind blowing because it would give you such insightful information as to how you can improve. But I’ve never been stopped on the way of a restaurant to give that kind of feedback. For me, if I was a small business owner, that would be the lifeblood of my organization.

What about you, Josh? Have you ever been stopped and asked for your experience?

Josh:                 Yeah, I actually have been. Not a lot. I mean, not a lot. It’s a really rare experience when it happens. The couple of restaurants who’ve done it have been outstanding restaurants.

Mark:               Right.

Josh:                 Their service has been impeccably good. Their food may have been good or may have been great but the service was impeccably great.

Mark:               Right.

Josh:                 What I have noticed at Sugarbush, in Vermont, has been doing that a lot. Now, the challenge I see is that if you don’t take action on the suggestions that are given, it actually becomes more of a negative than a positive.

We have this sort of thing at Sugarbush saying that their food in their pub is very good. Their food in the cafeteria needs improvement. I know there’s been at least 30, or 40, or 50 people who have said the exact same thing because its’s a group of us who ski there all the time then we’d do the survey. This is the thing we keep talking about. We don’t understand how they could possibly not have great food, especially with what they’re charging.

Mark:               Right.

Josh:                 Because they don’t deal with that issue, it makes you say, “Well, this is a waste of time, why should I share with them?”

Mark:               Right. Hopefully, they have the right mindset when they’re collecting that data. Obviously, you can’t change everything based on what customers are telling you. One customer might tell you the complete opposite of another one, right, so that’s a little bit hard to manage. But, right, if you know that other customers are saying the same thing and that organization refuses to change or doesn’t have the desire to change that then it comes across as if they’re just doing it because someone’s told them to do it or they think it’s the right thing to do, rather than that continuous improvement mindset.

Absolutely, you mean you would only collect customer data and stop customers if you meaningfully want to actually change your organization for the better. And that’s the whole point, right? They are telling you things that will drive your organization forward, that will make a difference to your organization to make it perform at a higher level. And if you didn’t want to perform at a higher level, why would you be collecting that data anyway in the first place?

Josh:                 I have no idea. Now, one of the things I’ve used, over the years – I just want to get your opinion about this is what I call the customer advisory board where I get a group of eight or ten customers who are leaders in our customer group. In other words, they speak for lots of people. We get together four times a year and we talk about specifically what they would like to see us do to become better and we help them understand what we do as a company so they understand more about what we do. One of the reasons I like this better than asking the customers who going out the door – which actually is great if you’re in a business-to-consumer business. But when you’re in a business-to-business activity, which is where I spend most of my time, I find the advisory board as a more valuable tool.

Do you were do anything with advisory boards?

Mark:               Yeah, absolutely. The big part of my book is our experience in Whistler. Whistler is a ski resort which is an hour and a half north of Vancouver, here in Canada.

Josh:                 Yep, know it well.

Mark:               We implemented a customer service program where we rolled out the 3Rs – reliability, responsiveness, relationships across the whole of the community, 20,000 people now have been trained in the 3Rs. We set up a customer advisory board there where we had local businesses who are going to be using the program to say, “Well, what do you like about this program? What’s working for you? When you use it inside your organization? How could we be doing a better job of helping you execute?”

And so, these people were basically our customs because we worked with the Whistler Chamber of Commerce to roll out the program. They were saying, “We love this aspect of the program but we’re still struggling with the coaching. Can you advise us how we use coaching more effectively?”

I think you’re absolutely right. In a transactional business, like a restaurant, maybe the idea of stopping people on the way out is not a bad approach. But if you’re B2B and you’ve got sort of eight key customers who are living and breathing your service experience regularly, I think that’s a fantastic approach.

Basically, the idea, Josh, anything you can do to collect meaningful data that would enable you to drive the customer experience forward. In a restaurant business, it might be the approach that I recommend. In your business, that customer advisory board may be a better approach to take. It’s basically taking a step back and say, “What kind of data do we need to collect that will enable us to have a meaningful retrospective to help us re-design our service system and kind of be more robust so we can continually raise the game in terms of our customer experience?”

Josh:                 The retrospective is sort of like the inspect process. One of my first business mentor had this thing called EIA which stood for Expect – Inspect – Accept, when you’re asking somebody to do something. It’s a delegation tool.

The challenge with small businesses is that to have great customer service, you have to be delegating effectively to do that. Most small business owners are the worst delegators who ever lived on the face of the Earth which is the reason their businesses stay small. In my experience, the number one thing that keeps a business from growing appropriately is the lack of the ability to delegate by the CEO of the company.

Mark:               Yep.

Josh:                 Does that make sense to you?

Mark:               Yeah, absolutely.

Josh:                 If you were to give these small business owners some advice about how to become an effective delegator, what would be the top one, two, or three things they should be thinking about?

Mark:               First of all, obviously, there’s always a yin and a yang. First of all, I think one of the reasons that entrepreneurs do become successful is because they don’t delegate. They are hands on. They are ever present. And so, they actually know what’s happening. I think, what happens is organizations grow is, when you do delegate, is that the leaders of the business lose touch with customers and they don’t actually know what customers really want. I think, obviously, being hands on and not delegating has a benefit as well.

In my book, I talk about a tight-loose-tight model. I think that’s the perfect way to delegate. The first tight is expectations. Leaders can delegate when they’re crystal clear with their expectations in terms of what does success look like for that employee? What does the leader expect from them? I think here’s the crucial bit, Josh, that most entrepreneurs miss is the employee needs to know what’s in it for them. How does them helping the entrepreneur succeed help that employee become more successful? How does that help that employee have a better career? You’ve got to link those two together. It’s just about the entrepreneur being successful and helping that business grow. The employees are going to be less accountable, moving forward.

I think, if you’re really tight in that first understanding of expectations and really tight in terms of the employee knows what’s in it for them. Then, you can allow them to be autonomous. Then, you can allow them to self-direct their own work a lot more. And then, you can allow them to not be micromanaged. No employee loves being micromanaged by a small business owner.

And then, I think, here’s the crucial thing, Josh, that most entrepreneurs miss. It’s that final tight. The first is the expectations – What’s in it for the entrepreneur? What’s in it for the employee? Then, the autonomy piece – allowing to self-direct their own work, work it out for themselves. The final tight is the follow up, the coaching, the inspection, giving them some feedback because “Well, I delegated this to you but I came back and I observed you. Here’s some feedback.” So, now, you’re even tighter in terms of your expectations. Now, you’re even tighter in terms of what you can do next, to be even better in your role.

I think, when you get those three working together, now you have that continuous circle of being able to build accountability. I think that’s what delegation is all about. It’s not necessarily about delegation. It’s about accountability. When employees feel accountable, you can trust them to be able to, as an entrepreneur, to walk away and allow your employees to live out what you’ve asked them to do.

And so, by being clear with your expectations, empowering them, and then following up and giving them feedback, rather than just disappearing and not coming up with any feedback at all and not having that retrospective, then you don’t close that loop, right? And then, also, if you come back and give feedback, then they’re even tighter now with their expectations on what’s in it for them and how they can raise their game and perform at a higher level as well.

Josh:                 Mark, unfortunately, we are out of time. I’m going to bet that there are tons of people, who are listening to this podcast, that want to find out more about what you do– at least, I want to find out more about what you do. If we were to do that, how will we go about doing that?

Mark:               Obviously, you can buy the book, Science of Service. That kind of gives a bit more of a deeper understanding of what we talked about. They can join me on Twitter, @mark_colgate. Twitter as well. Also, on LinkedIn, Mark Colgate.

It’s an unusual name. I’ve tried to find the connection with the Colgate family. No luck so far. So, google Mark Colgate and they will find me straight away.

Josh:                 Okay. That sounds great.

I also have an offer for you. One of the things I’ve noticed about every private business – and it really doesn’t matter what size it is, although once you get above 500 to a thousand, it probably becomes a little bit less of an issue. With small businesses with 50 employees or less, what’s the one thing we all want more of? Cash. Because of that, I’ve developed this program we call Cracking the Cash Flow Code which helps you figure out how to get enough cash to fill the four areas of need which is lifestyle, an emergency fund, a fully-funded growth program, and a fully-funded retirement program because, although you might not think so, the value of your business is not going to be enough to get you to retirement.

All you’ve got to do is click on the link below this podcast line and you’ll get our infographic which starts teaching you about what it’s going to take you to Crack The Cash Flow Code.

Hey, this is Josh Patrick. We’ve been with Mark Colgate. This is The Sustainable Business. Thanks a lot for stopping by. I hope to see you back here really soon.

Narrator:         You’ve been listening to The Sustainable Business podcast where we ask the question, “What would it take for your business to still be around a hundred years from now?” If you like what you’ve heard and want more information, please contact Josh Patrick at 802-846-1264 ext 2, or visit us on our website at www.askjoshpatrick.com, or you can send Josh an email at jpatrick@askjoshpatrick.com.

Thanks for listening. We hope to see you at The Sustainable Business in the near future.

Topics: micromanagement, proven formula, sustainable business podcast, Sustainable Business, stand out from the crowd, the science of service, systems in service business, customer loyalty, delegation

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